Your Number One Trusted Business Adviser

Telephone: 01305 760600

Email: info@advocouk.com

CORONAVIRUS UPDATE 22 OCTOBER 2020

Job Support Scheme (JSS) Updated 22-10-20

 

The Job Retention Scheme (JRS)  will close on 31 October 2020.   The Job Support Scheme (JSS) will replace the JRS. The Chancellor has now updated the JSS again.

 Full details can be found using this link;

 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/928761/JSS_Open_factsheet.pdf

 

What is the Job Support Scheme - JSS?

 

The Job Support Scheme for Open Businesses, is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce.

 

The business will continue to pay its employee for time worked, but the burden of hours not worked will be split between

the employer and

the Government (through wage support) and

the employee (through a wage reduction),

 

To enable  the employee to keep their job.

 

The scheme will open on 1 November 2020 and run for 6 months, until April 2021.

 

Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

 

 

What has Changed?

 

The announcement on 22 Oct reduces the employer contribution to unworked hours to just 5%, and reduces the minimum working hours requirements to 20%, so those working just one day a week will be eligible.

 

That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

 

The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month (more than doubling the maximum payment of £697.92 under the previous rules).

 

Example:

 

A full-time employee in the hospitality industry is paid an average of £1,100 per month.

Under the Jobs Support Scheme for open businesses, the employee will still receive £807 gross a month.    (See calculations below --- £220 + £543 + £44)

The Employer's position is;

 

Normal pay for 20% working hours - £1,100 x 20% = £220

(leaving £880 for unworked hours ---- £1100 - £220)

Government will pay the employer £543 (£880 x 61.67%)

 

Employer pays a further £44 (£880 x 5%)

Total cost to the Employer £264 (£220 + £44) for 20% hours worked.

 

The Employer will also have to pay any Employers NIC & Employers Pension contributions that may be due.

 

Extension of the Job Support Scheme (JSS)

 

This extended support will be available to businesses across the UK that are required to close their premises due to coronavirus restrictions.

 

Businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible to claim under this extended JSS scheme.

 

Employers will only be able to use the scheme for employees who cannot work (paid or unpaid) for that employer.

 

What are the additional benefits offered?

  • Government will pay two-thirds of employees’ monthly salaries up to a maximum £2,100 per month, per employee.
  • Employers will not be required to contribute to wages and will only have to pay any National Insurance and pension costs.
  • The scheme will only apply to businesses required to close due to coronavirus restrictions. It will include premises restricted to delivery or collection only services from their premises.
  • To claim, employees must be off work for a minimum seven consecutive days.

 

 

When will the additional JSS payment be made?

As with the wider JSS scheme, claims for November will be processed in December via an online portal. Subsequent months’ claims will thus be paid one month in arrears.

 

Self-Employment Income Support Scheme Grant Extension

The Self-Employment Income Support Scheme Grant Extension provides support to the self-employed in the form of two grants, each available for three month periods covering

  • November 2020 to January 2021 – 40% of average trading profits, capped at £3,750
  • February 2021 to April 2021 – Level to be determined

 

Who can claim

To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade and either:
    • are currently actively trading but are impacted by reduced demand due to coronavirus
    • were previously trading but are temporarily unable to do so due to coronavirusWhat the Grant Extension coversThe Government will provide a taxable grant covering 40% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £3,750 in total.The grants are taxable income and also subject to National Insurance contributions.HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.Cash Grants for business required to close in EnglandCash grants to businesses required to close in England are also being increased. These cash grants are to support business owners with fixed costs; those costs payable even if the business is closed.
    • Grants will be linked to rateable values of business premises and will paid every two weeks. This should provide extra financial support to businesses across the hospitality sector that are required to close due to COVID restrictions.
    •  
    •  
    • How to claim
    • The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.
    • The extension will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.
    •  
  • Smaller businesses with rateable values at or below £15,000 will be able to claim £1,300 per month.
  • Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £2,000 per month, and
  • Larger businesses will be able to claim £3,000 per month.

 

The devolved administrations in Scotland, Wales and Northern Ireland will be receiving additional financial support to offer similar measures in the devolved areas, should they choose to do so.

 

Local Restrictions Support Grant - Tier 2

 

What is the scheme?

 

We are providing additional funding to allow local authorities to support businesses in Tier 2 areas which are not legally closed, but which are severely impacted by the restrictions on socialising.

 

The funding local authorities will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area, and will assume that these businesses receive grants equivalent to 70% of the grants for which legally closed businesses are eligible.

 

This would be equivalent to:

 

  • For properties with an RV of £15k or under, grants of £934 per month
  • For properties with an RV of between £15k-£51k, grants of £1,400 per month
  • For properties with an RV of £51k, grants of £2,100 per month

 

It will be up to Local Authorities to determine what precise funding to allocate to each business – the above levels are only an approximate guide.

 

Local authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which may not be in the business rates system.  This scheme will initially run until April, with a review point in January.

  

Who is eligible?

 

Local authorities have the freedom to determine the precise eligibility criteria for these grants in their local areas.

 

The guiding principle for local authorities is to use the funding to support businesses which have not been legally required to close, but which are nonetheless severely impacted by reduced demand caused by Tier 2 restrictions on socialising.

 

How can businesses access the grants? Grants will be administered by Local Authorities, and businesses are likely to need to apply to their local authority for support. It is up to local authorities to determine the payment schedule and timings for these grants.

 

What can businesses use the grants for?

 

Businesses can choose to spend the grants as they wish. We expect that many businesses will use the grants to cover high fixed property-related costs.

 

What about areas which have been living under Tier 2-equivalent restrictions for several months already? Will you help them?

 

Some areas have been subject to restrictions on socialising for several months, before the tiering system was introduced. Funding for these areas will be backdated until the point at which these restrictions began.

 

 

Coronavirus Update 19 October 2020

Job Support Scheme (JSS)

 

The Job Retention Scheme (JRS) will close on 31 October 2020.   The Job Support Scheme (JSS) will replace the JRS. Full details about the JSS can be found using this link;

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/921389/Job_Support_Scheme_Factsheet.pdf

 

What is the Job Support Scheme - JSS?

 

The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce.

 

The business will continue to pay its employee for time worked, but the burden of hours not worked will be split between

the employer and

the Government (through wage support) and

the employee (through a wage reduction),

 

To enable the employee to keep their job.

 

The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.

 

Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

 

The scheme will open on 1 November 2020 and run for 6 months, until April 2021.

 

 

Who is eligible?

 

All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.

 

Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

 

In order to support viable jobs, for the first three months of the scheme the employee must work at least 33% of their usual hours. After 3 months, the Government will consider whether to increase this minimum hours threshold.

 

Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.

 


 

 

What does the grant cover?

 

For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee.

 

The Government contribution will be capped at £697.92 a month.

 

Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution.

 

The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.

 

 

Example

 

Beth normally works 5 days a week and earns £350 a week. The company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).

 

Her employer pays Beth £140 for the days she works. (£350 /5 x 2)

 

For the time she is not working (3 days or 60%, 350 / 5 x 3 = £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.

 

The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.

 

Total cost to the employer = £210 (£140 + £70) - Total cost 60% (£210 / £350)

 

Hours Employee Worked                    33%     40%    50%     60%     70%

Hours Employee Not Working             67%     60%    50%     40%      30%

Employee Earnings (% of normal)       78%     80%    83%     87%     90%

Gov't Grant (% of normal wages)        22%     20%    17%     13%     10%

Employer Cost (% of normal wages)    55%     60%    67%     73%     80%

  

Extension of the Job Support Scheme (JSS)

 

This extended support will be available to businesses across the UK that are required to close their premises due to coronavirus restrictions.

 

Businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible to claim under this extended JSS scheme.

 

Employers will only be able to use the scheme for employees who cannot work (paid or unpaid) for that employer.

 

What are the additional benefits offered?

  • Government will pay two-thirds of employees’ monthly salaries up to a maximum £2,100 per month, per employee.
  • Employers will not be required to contribute to wages and will only have to pay any National Insurance and pension costs.
  • The scheme will only apply to businesses required to close due to coronavirus restrictions. It will include premises restricted to delivery or collection only services from their premises.
  • To claim, employees must be off work for a minimum seven consecutive days.

 

 

When will the additional JSS payment be made?

As with the wider JSS scheme, claims for November will be processed in December via an online portal. Subsequent months’ claims will thus be paid one month in arrears.

 

 

Cash Grants for business required to close in England

 

Cash grants to businesses required to close in England are also being increased. These cash grants are to support business owners with fixed costs; those costs payable even if the business is closed.

Grants will be linked to rateable values of business premises and will paid every two weeks. This should provide extra financial support to businesses across the hospitality sector that are required to close due to COVID restrictions.

  • Smaller businesses with rateable values at or below £15,000 will be able to claim £1,300 per month.
  • Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £2,000 per month, and
  • Larger businesses will be able to claim £3,000 per month.

 

The devolved administrations in Scotland, Wales and Northern Ireland will be receiving additional financial support to offer similar measures in the devolved areas, should they choose to do so.

 

Tax Diary July/August 2020

1 July 2020 - Due date for Corporation Tax due for the year ended 30 September 2019.

6 July 2020 - Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2020 - Pay Class 1A NICs (by the 22 July 2020 if paid electronically).

19 July 2020 - PAYE and NIC deductions due for month ended 5 July 2020. (If you pay your tax electronically the due date is 22 July 2020)

19 July 2020 - Filing deadline for the CIS300 monthly return for the month ended 5 July 2020. 

19 July 2020 - CIS tax deducted for the month ended 5 July 2020 is payable by today.

1 August 2020 - Due date for Corporation Tax due for the year ended 31 October 2019.

19 August 2020 - PAYE and NIC deductions due for month ended 5 August 2020. (If you pay your tax electronically the due date is 22 August 2020)

31 July 2020 – Self-assessment second payment on account for 2019-20 is due. The government has announced measures that will allow many tax payers to delay this payment until January 2021, if they wish. 

19 August 2020 - Filing deadline for the CIS300 monthly return for the month ended 5 August 2020. 

19 August 2020 - CIS tax deducted for the month ended 5 August 2020 is payable by today.

Unwinding furlough BUSINESS SUPPORT

 There were changes to the Coronavirus Job Retention Scheme (CJRS) that commenced at the beginning of July.

Now that we have the option to bring back employees on a part-time basis and still have a measure of support for their unpaid time, what considerations should we consider when planning the effects of the gradual unwinding of the CJRS?

Here are a few issues you may need to consider:

  • Based on your present circumstances, what turnover levels are you likely to achieve from the end of this month?
  • Apart from staff costs, what are your other fixed cost projections?
  • You will need to account for the gradual impact of presently furloughed payroll costs as the CJRS unwinds towards close-down 31 October 2020.
  • And last, but not least, have you created formal cash-flow and profit forecasts?

Armed with this information, you can then consider the combination of staffing levels that will allow you to at least breakeven from a profit perspective. 

Planning is obviously paramount. If you have your account’s updated in real-time – using cloud based software – this will provide you with much needed data on which to base your decisions.

The UK economy seems set to break all records for reduction in output. As the 20% drop in May illustrates, we are descending into uncharted territory.

If you need help creating the necessary “what-if” planning reports, please call. There has never been more pressing need to make informed decisions. Delaying or ignoring this need is rather like driving blind-fold. 

New support for High Street BUSINESS SUPPORT

A package of support to help high streets to get back on their feet was launched 12 June 2020. This announcement was made just days before shops were allowed to reopen on 15 June.

The High Streets Task Force will provide access to cutting-edge tools, training, information and advice for high streets across England as part of the government’s efforts to get shops open and back in business.

This support is open to local councils and all organisations involved with high streets and will include free access to online training programmes, webinars, data and intelligence on topics including recovery planning and coordination, public space and place marketing.

The support will form one part of the Task Force’s 4-year programme which will focus on the long-term transformation of town and city centres and helping communities re-imagine and revitalise their high streets

Parents returning from paternity or maternal leave EMPLOYMENT LAW

One aspect of the 1 July changes to the CJRS was the closing date to new entrants was set as 30 June 2020. This disadvantaged parents who had been on extended parental or maternal leave in recent months and were intending to return to work after 30 June.

The government has now confirmed that parents on statutory maternity and paternity leave who return to work in the coming months, after a long period of absence, will be permitted to be furloughed.

This will only apply where they work for an employer who has previously furloughed employees.

Quick contact form.

Cookies make it easier for us to provide you with our services. With the usage of our services you permit us to use cookies.